On Reformation Day in 1938 (October 31) the church building served its congregation for the last time. Then the building, the oldest structure in Berlin proper, was given up to the government, to be used as a concert hall and ecclesiastical museum.[2] The number of parishioners had shrunk due to the ever intensifying commercialisation of the inner city with residential premises being superseded by offices and shops. The congregation later merged with that of the Church of Our Lady.

During World War II the Church of St. Nicholas had its roof and the tops of its towers destroyed as a result of Allied bombing. In 1949 all the vaults and the northern pillars collapsed. The ruins were in East Berlin, and it was not until 1981 that the East German Democratic Republic authorities authorised the rebuilding of the church, using old designs and plans. The Church of St. Nicholas as seen today is largely a reconstruction. Today the church serves again mainly as a museum and occasionally as a concert venue, administered by the Stiftung Stadtmuseum Berlin (Landesmuseum für Kultur und Geschichte Berlins). It is renowned for its acoustics and the rebuilt church has been equipped with a fine set of 41 bells.